William Hill Plc, Re Companies Act 2006

On sanctioning a scheme of arrangement, the court must decide whether the explanatory statement gave ordinary scheme members sufficient information to make an informed decision. Disclosure need not include every contractual detail. The question is whether any omission was sufficiently material to cause an assenting member to change their vote or an abstaining member to vote against the scheme.

The court may sanction a scheme despite an inaccuracy or omission where the deficiency did not materially affect the vote. It should be cautious before overturning an approved scheme at the request of persons who were not entitled to vote, particularly where no voting shareholder claims to have been misled. The court sanctioned the transfer scheme.

William Hill plc sought sanction of a transfer scheme under Part 26 of the Companies Act 2006 implementing Caesars’ recommended cash acquisition of the Company. The scheme received the statutory majorities.

HBK Investments LP opposed sanction. It held a small number of shares but substantial derivative interests and argued that the explanatory statement inadequately described Caesars’ rights under the joint venture agreement to maintain and alter a restricted acquirers list, potentially affecting competing bids. The central issues were whether the disclosure was sufficient, whether any deficiency made the voting outcome unreliable, and whether a further meeting should be ordered.

1. Sanction granted. The court sanctioned the scheme upon the usual undertaking from the acquirer.
2. The court’s task was to determine whether it could properly rely on the scheme meeting. The explanatory statement had to explain the effect of the scheme and provide information reasonably necessary for shareholders to make an informed decision: Companies Act 2006, s. 897(2). It had to state the objectively main facts relevant to the recommendation, including the existence of the joint venture termination right.
3. Precise contractual terms did not invariably require disclosure. Their significance depended on the circumstances and the perspective of the ordinary class member. The court was not persuaded that the detailed mechanics of the restricted acquirers provision were significant to class members as a whole.
4. The relevant safeguard was materiality. The court had to consider whether the alleged deficiency caused mistaken votes: whether corrected disclosure would have caused an assenting shareholder to change their view or an abstaining shareholder to vote against the scheme.
5. No shareholder who voted at the meeting claimed to have been misled. The objections came principally from holders of derivative interests who were not entitled to vote. The evidence did not establish that the alleged deficiency affected the outcome or that non-attending shareholders would have regarded the additional information as significant.
6. A further meeting would involve a different shareholder base and different market conditions. It would not provide a proper basis for disregarding the original vote, particularly since the scheme would have to be considered on materially the same information concerning the restricted acquirers provision.
7. The offer was fair in the relevant sense. It was one which an ordinary class member, considering ordinary class interests and the substantial premium offered, could properly enter into. The question was not whether it was the best possible transaction.

The judgment records an earlier convening hearing before ICC Judge Prentis on 23 October 2020 and the subsequent scheme meeting on 19 November 2020. No appeal history is stated.